Negative Article On Baidu (BIDU)

There's a negative article on Baidu (Nasdaq: BIDU) over at SeekingAlpha questioning the company's SEC filings. The author, Shane Farley, took a short position in the stock saying the company's claims that its controversial mp3 channel gets on 3.3% of their total traffic is very wrong and misleading. The article lays-out datapoints and information that dispute Baidu’s claim that their mp3 channel only gets 3.3% of their traffic.

The aurthor cited:
1) Baidu blocks full access to mp3.Baidu.com outside of China, where Alexa measures most of their traffic. Baidu management must know this.
2) Comscore data shows Baidu mp3s getting around 9-10 times the traffic of what Baidu management claims in their SEC filings.
3) mp3.Baidu.com does more traffic than TaoBao.
4) Pali Research analyst note on Baidu.
5) 2005 Chinese government study of internet users says mp3 is the foundation of Baidu’s fast growth. Over 50% of users search for music.
6) Baidu IPO prospectus.
7) China Market Research Group says Baidu mp3 is 20-30% of total traffic.
8) Baidu talk is shady.

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